OSCE: Privatization Fails To Bring Good Corporate Governance

Prague, 13 June 1997 (RFE/RL) - The Organization for Security and Cooperation in Europe (OSCE) says the basic objectives of privatization have only been partially achieved across eastern and central Europe.

In a statement issued at its Fifth Economic Forum in Prague, the OSCE said state-owned and former state-owned firms in many ex-Communist countries are still insufficiently managed. The OSCE says this has hampered the ability of the newly-privatized companies to attract fresh investment and to restructure themselves to survive in a competitive market economy.

The OSCE says further legal reforms are needed, particularly in the Commonwealth of Independent States, and that laws already on the books must be better enforced.

Henrik Wohlk, a Danish Foreign Ministry officer who chaired the Economic Forum, said that eastern countries will attract sufficient foreign investment only if they create a legal infrastructure that is "transparent and predictable." The three-day forum ended today.